The Costs Incurred When Poor Quality Goods or Services Are

question 148

Multiple Choice

The costs incurred when poor quality goods or services are detected and corrected before delivery to customers are called ________ costs.

• A)appraisal
• B)external failure
• C)prevention
• D)internal failure

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Definitions:

Finished Goods Inventory

Completed products that are ready to be sold but have not yet been sold to customers.

Product Costs

Costs directly tied to the creation of a product, including raw materials, labor, and manufacturing overhead.

Manufacturing Process

A sequence of operations and processes designed to create a specific product from raw materials or components.

Balance Sheet

A list of the assets, liabilities, and stockholders’ equity as of a specific date, usually at the close of the last day of a month or a year.